Oregon's jobless rate spikes to 7.3%

by
Richard Read, The Oregonian

Monday November 17, 2008, 8:33 PM

Thomas Boyd/The OregonianThe growth of solar manufacturers such as Solaicx, which has a new Portland facility, has not been enough to offset the loss of other manufacturing jobs in the state.

Consumers slapped shut their wallets in October, helping drive the unemployment rate to 7.3 percent in Oregon, which lost 14,100 jobs since September -- the worst seasonally adjusted monthly decline since February 1981.

Tom Potiowsky, Oregon's state economist, called the numbers horrible, saying Oregon's unemployment rate could reach or exceed 8 percent. The recession appears to be getting deeper than predicted, said Potiowsky, who doesn't expect better economic growth until 2010.

"Consumers are going on strike," said Michael Parks, publisher of Marple's Pacific Northwest Letter, a Seattle-based economic bulletin. "It's no wonder, because their housing prices are going down, their job security is eroding, and by the way, have you opened your 401K statement lately?"

A monthly state report released Monday showed significant seasonally adjusted declines across most sectors in October, with more than 2,000 jobs lost in each of the manufacturing, professional and business services, and leisure and hospitality sectors.

"Nine-tenths of a percent is really huge," Potiowsky said. "The speed at which this economy is going down is just very surprising."

Potiowsky, who issues his quarterly economic forecast Wednesday, sees the continuing national credit crisis and the housing slump lengthening recovery. Oregon retailers dropped 400 jobs between October and November. Over the past year, the state's retail industry lost 4,100 jobs, between layoffs and jobs that were left unfilled through attrition.

The Kroger Co.'s Portland-based grocer Fred Meyer Stores has reduced the hours of its employees in recent months, said Melinda Merrill, a company spokeswoman. However, there has been no formal push to reduce hiring, which she said is done by individual stores.

"We're feeling it," she said of consumers' tightening purse strings, "but we had a strong back-to-school (shopping season) and we're expecting a strong Thanksgiving and Christmas."

The chain is hiring less holiday help -- between six and 12 fewer employees per store -- aiming to give the extra hours to year-round employees who have lost hours recently, she said.

The state's restaurant industry shed 1,900 jobs in October. Restaurateurs said the fall of Wall Street in mid-October seemed to echo in their dining rooms.

From single, independent operators to some of Oregon's larger chains, the decline in customers has been sharp. It hits at a time when most are facing a second year in which food prices escalated as much as 8 percent higher than the past year.

John McGrath, owner of McGrath's Fish House, said his Salem-based business slowed in mid-October and that since last year, he's shed 66 restaurant jobs in Oregon through attrition.

"We haven't laid anyone off, but we just don't have as many hours to give people," he said.

Michael Lloyd/The OregonianAs nervous consumers continue to spend less, restaurants such as McGrath's Fish House in Beaverton -- along with most business sectors across Oregon -- experienced a significant slowdown in customers during October. As a result, Oregon's work force shrank and unemployment rose.

McGrath, who operates 20 restaurants in six states including eight locally, said his outlets in Oregon have fared better than those in other states. He said he hopes the worst is over and he's already seen some busier days this month.

Fallout from the financial crisis has hit Oregon construction workers hardest. The construction industry employed 95,900 in October, down 11 percent since October 2007. That's the largest decline of any industry by more than 3 percentage points.

The state lost 2,000 construction jobs in October compared with one month earlier. Construction jobs had peaked at 110,700 in August 2007, the month that Portland-area home prices hit their peak.

"It's killing us," said Brian Clopton, who owns Brian Clopton Excavating. His Sherwood company carves up bare land to turn it into new subdivisions. "In all the 30 years I've been doing this, this is the worst, and it happened really quick."

Clopton employed 70 people making $40,000 to $50,000 a year during the recent housing boom. He's got about 35 employees now and expects to be down into the 20s next month.

Oregon's high-tech sector has shed 2,000 jobs in the past year, 1,100 of them in the past month alone. The downturn is concentrated in semiconductor manufacturing. Memory chip producer Hynix Semiconductor closed its Eugene factory last summer, eliminating 1,400 jobs.

More semiconductor companies are coming under pressure as business and consumer demand drops globally. Last week, Intel dramatically lowered its forecast for the fourth quarter of the year, estimating that its sales would fall 16 percent.

Intel, Oregon's largest private employer, hasn't announced any big job cuts. But everyone in the chip industry is losing sleep these days, said Greg Cole, Pacific Northwest chairman of the trade group SEMI.

"Things just are not looking too sharp for the next eight months to a year," Cole said, "and we're looking at not seeing a recovery probably until the last part of 2009."

Oregon's broader manufacturing sector, in steady decline since the 1970s, lost 5,000 more jobs in October. As a share of Oregon's total economy, manufacturing jobs are at their lowest point on record -- 11.1 percent.

Monday's report does not include upcoming cuts at Freightliner and Tektronix. But the jobs reported lost do include about 1,200 aerospace workers in Oregon who will resurface in the figures next month as the Boeing strike ends.

Oregon's total nonfarm payroll employment dropped from 1,725,000 in September to 1,710,900 in October, seasonally adjusted. The largest monthly drop since February 1981 represented 0.8 percent of Oregon's employment, compared with 1.4 percent in 1981 when the work force was smaller.

Since October 2007, the number of unemployed people in Oregon has jumped by 40,458 to 134,096. The state's unemployment rate has risen by 1.9 percentage points this year.

Washington officials will release their October unemployment rate today. The rate fell in September from 6 percent to 5.8 percent, as aerospace and software boosted the state's economy.

Gov. Ted Kulongoski, in Asia on a trade trip, called on Congress Monday to enact another federal stimulus package that includes a federally funded unemployment-benefits extension of another 13 weeks. Absent that, Kulongoski said, he would work with the Legislature to enact a state-funded emergency extension for benefits.

Legislators are preparing job-creation proposals for the upcoming session in January. Oregon Senate President Peter Courtney, D-Salem, and his aides calculate the state could create about 35,000 jobs through a bond-financed public-works program combined with capital-construction initiatives proposed by Kulongoski.

"We're headed toward double-digit unemployment," Courtney said. "We should think in terms of an all-out effort, everything and anything we can do."

Republicans advocate a different approach.

"In January, the Legislature must move quickly to give tax relief to lower-income workers and all working families -- two simple tax-reform measures that would create over 20,000 new jobs," said House Republican Leader Bruce Hanna, R-Roseburg. "The state can't reverse its horrible economic performance by simply expanding government and further increasing debt."

Ryan Frank, Mike Rogoway and Laura Gunderson of The Oregonian staff contributed to this report.

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ONE: Pride and sense of worth. If it means I take a job shovelling natural fertilizer, I would rather do THAT than suck off someone else's hard work.

TWO: Welfare isn't for straight white males.

THREE: Unemployment insurance is something taken out of my paycheck by my employer, so I'm STILL not sucking off anyone if I were laid off and took A COUPLE OF WEEKS' WORTH.

Sounds like you'd rather trade in TRUE RIGHTS for demonrat/socialist EMPTY PROMISES. If so, you're going to end up getting neither. Don't expect me to follow suit. I actually use what's between my ears, knothead.